US Textile Makers Have Problems With New Trade Bill

James A. Morrissey, Washington Correspondent

US textile manufacturers are deeply concerned about legislation introduced in the Senate last week
that would provide duty-free treatment for apparel imports from some of the poorest nations in
Asia. The legislation's sponsors, Sens. Dianne Feinstein, D-Calif., and Kit Bond, D-Mo., say it is
designed to help 14 impoverished nations sustain "vital export industries and promote economic
growth and stability," but US manufacturers say it will undercut existing preferential trade
agreements and cost American jobs.

While the bill calls for use of yarn and fabric made in the United States or the
participating countries, it allows for yarn and fabric inputs from anywhere in the world during the
first eight years of the proposed agreement. US textile manufacturers see it as a potential conduit
for yarn and fabric made in China, and in addition, they fear it will undercut virtually every
preferential trade agreement the United States has with nations and regions such as Mexico, the
Caribbean, African nations that are participants in the African Growth and Opportunity Act; and
bilateral agreements with other countries throughout the world.

An analysis of the bill by the National Textile Association (NTA) concludes "it will give
duty-free access to a quantity of apparel assembled in the beneficiary countries and third parties
at a level approximately equal to historic trade under general rates of duty. It is not likely to
lead to increases of US inputs." In addition, NTA expects most of the growth would come from
Bangladesh, which already is a major exporter of apparel.

The American Manufacturing Trade Action Coalition points out that Bangladesh already is the
third-largest exporter of apparel to the United States, just behind China and Vietnam; and
Cambodia, another participant, is not far behind. Many of the 14 designated countries do not have
any textile manufacturing capability, and, therefore, would not benefit from the legislation on a
scale anywhere near as great as the already dominant apparel-exporting countries.

Cass Johnson, president of the National Council of Textile Organizations, sees the bill as a
boon to US retailers and other importers, as they would not have to pay the nearly $1 billion in
duties they currently pay on imported goods from Bangladesh and Cambodia. "They would be getting a
billion dollar bailout under the guise of helping impoverished countries," he said.